Oil jumped to the highest in more than two years as violence intensified in Libya, stoking concern crude supplies will be disrupted as violence escalates around the Middle East and North Africa.
Futures for April delivery in New York rose as much as 9.8 percent from the Feb. 18 settlement and London-traded Brent surged to the highest since September 2008, as soldiers deserted Libyan leader Muammar Qaddafi's government and diplomats resigned. Brent may trade between $105 and $110 a barrel in coming weeks if uncertainty continues, according to Goldman Sachs Group Inc, according to Bloomberg.
According to Telegraph.co.uk, US oil contracts jumped more than $7 a barrel on Tuesday morning to over $93, chasing Brent crude, which traded above $108, as the global oil system is drawn into the vortex.
While Egypt is a minor oil player, Libya's Sirte Basin holds Africa's largest reserves and supplies 1.4m bpd in exports, mostly to Italy, Germany and Spain.
BP, Statoil, Total and ENI have begun evacuating families and non-essential staff from Libya. BP chief Bob Dudley told Sky News that the company has only limited exploration in Libya but "remains committed to doing business" there.